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LONDON (Reuters) - British chipmaker CSR, which makes technology used in headphones and speaker docks, said it had rejected a takeover approach from Microchip Technology Inc, sending its shares up as much as 27 percent.
"The price proposed by Microchip has been rejected and the board is considering its options for the company," CSR said in a short statement on Thursday.
CSR issued the statement after a report on the Financial Times website said it was talking to a potential suitor.
Shares in the group, which had fallen 9 percent year-to-date, were trading up 24 percent at 714.5 pence at 10:30 AM BST, valuing the group at 1.2 billion pounds.
CSR, short for Cambridge Silicon Radio, specialises in bluetooth technology, with its chips used in products like Apple-owned Beats headphones.
Chief Executive Joep van Beurden has been shifting the company to focus less on devices like digital cameras and more on higher margin sectors like music, audio and automotive.
Under British takeover rules, Microchip has until Sept. 25 to either announce a firm offer for CSR or walk away.
J.P. Morgan Cazenove is advising CSR.
(Reporting by Paul Sandle; Editing by Neil Maidment)